June 18, 2012

HARRY’S WEEKLY UPDATE
A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET


OK, HARRY, IS THE real estate MARKET REALLY AS POSITIVE AS YOUR ENEWSLETTER MAKES IT SEEM ??

Absolutely !!!! It’s hard not to get excited about the prospects for our local real estate market, when you read the stories coming out of the national press and our local media. Here are some recent examples:

• MORTGAGE APPLICATIONS SOAR TO HIGHEST LEVELS SINCE SPRING 2009 (Housingwire 6/13/2012)
• AMERICANS SEE BIGGEST HOME EQUITY JUMP IN 60 YEARS (Bloomberg 6/15/2012)
• FORECLOSURES DOWN FOR 20TH STRAIGHT MONTH (Housingwire 6/14/2012)
• INVENTORY OF FOR-SALE HOMES FALLS 20% FROM A YEAR AGO (Realtormag 6/13/2012)
• 30 YEAR MORTGAGE RATE DROPS TO A RECORD LOW (The Gazette 6/8/2012)
• LATE-SUMMER EMPLOYMENT OUTLOOK SUNNY IN SPRINGS (The Gazette 6/12/2012)

Furthermore, our local statistics show that our local market is doing even better than the national market. Comparing our recent May figures with one year ago, we see that our average sales prices are up 9.3%. our median sales prices are up 13.5% and the number of sales is up 15.8%. These numbers show a market that looks good in anybody’s book.

The only negative number for prospective buyers is that our inventory of available homes for sale has shrunk 24.2%.

Finally, we just received a copy of a study commissioned by PPAR which shows remarkable upward trends in our local market. The study by Fred Crowley, chief economist for the Southern Colorado Economic Forum, shows that:

• Local business conditions in general are improving
• Foreclosures are dropping
• New home building is rising
• Single-family home sales are rising
• Demand for homes is up
• Total listings under contract are up 21% in May
• Average days-on-the-market is down

PLEASE CLICK HERE for a copy of this report, and please note pages 9-15, which contain the data for our local real estate market.

The bottom line is that your dream home is now within your grasp …However, it may not be tomorrow, as prices and rates rise and as buyer competition for homes kicks in.

Call us to discuss your new home at 598-3200, or, 800 677-6683 (MOVE).


MARKETING PHILOSOPHY?? ….WHAT IS IT???

The other day, we had dinner with several friends to celebrate my upcoming 40th year of being in the real estate business in Colorado Springs. They asked me to explain how I have managed to build such a good reputation and a loyal following in such a competitive industry….in other words, what is my marketing philosophy.

It was a good question and I thought our readers might be interested my reply.

First of all, I don’t consider a sale to be successful just because it closes. I think my obligation to my clients requires that every transaction should add to their economic advancement. That means negotiating a fair price, a full discussion of all the factors that might affect the transaction (neighborhood history, economic trends in the area, etc.) an impartial look at the current inventory, a mortgage that will be sustainable and a reasonable expectation of an increase in the value of the home. Fortunately, because I have been gifted with a good understanding of real estate finance, I have been able to offer this kind of total real estate expertise to my clients.

Sometimes, this type of realistic approach ends up turning-off a sale, but that may be the best course of action for my client at that particular time. Most clients appreciate the opportunity to make an informed decision … and I don’t look at a closing as the end of my relationship with my client. I consider a closing as the beginning of a respectful friendship.

Does this marketing philosophy pay off? Well, I think that a 40 year track record and a sales history that is 50% higher than the typical Realtor would indicate that it does….and, for the record, I am not aware of any of my clients who have suffered foreclosure. What other Realtor do you know who can say that??

Give me a call at 598-3200, or, 800 677-6683 (MOVE), to talk about the local market.

INVENTORY OF FOR-SALE HOMES FALLS 20% FROM YEAR AGO
Daily real estate News | Wednesday, June 13, 2012

The number of homes on the market continues to become a shrinking pool. Inventory of for-sale single-family homes, condos, townhomes, and co-ops dropped 20 percent in May compared to year-ago levels, according to data from 146 local markets.

In April, the number of ‘for-sale’ homes was 2.5 million, which marked the lowest number for an April since 2006.

Inventories of “For Sale” homes in May declined even further in all but two of the 146 markets tracked by Realtor.com.

Our Colorado Springs inventories have shown an even sharper decline.

While inventories were on the decline, the median national list price was on the rise, inching up 3.17 percent in May compared to May 2011.

The Los Angeles Times discussed this topic (June 10, 2012) in an article titled, “Shortage of homes for sale creates fierce competition”. Some of the points in the article were:

• The newest problem for the slowly improving housing market isn't a shortage of serious buyers, it's a shortage of good homes.
• Would-be buyers are packing open houses and scrambling to make offers on properties before they are even listed. Bidding wars are erupting. And real estate agents are vying fiercely to represent the few sellers that do exist.
• Housing inventory has sunk to levels not seen since the bubble years. The number of American homes with a "for sale" sign hit 2.5 million in April, the lowest number for an April since 2006, according to the National Assn. of Realtors.
• The much-predicted foreclosure wave that was expected to dump more homes onto the market has not materialized. Fewer borrowers are entering default, and banks are better managing the properties they do have on their books.
• In addition, professional investors bankrolled by private equity firms and hedge funds are pouncing on bank-owned homes, often turning them into rentals…. So, you should think about making your move right now, before prices rise and inventories shrink even more.

This lack of available homes is maddening for those consumers who thought 2012 would be the year to buy, but now find themselves bidding against other prospective buyers. …So, Call us now to discuss your new home at 598-3200, 0r, 800 677-6683 (MOVE).


SALES AND LISTING STATISTICS

Click here to see the most recent Sales and Listing information for the Pikes Peak area. These statistics are published by the Pikes Peak Association of Realtors and can be helpful to you in evaluating and comparing current listings in the various neighborhoods in our area. If you would like to ask any questions about this data, please give us a call at 598-3200, 0r, 800 677-6683 (MOVE).

 

8 SCENARIOS THAT HURT MORTGAGE QUALIFICATION
By Jack Guttentag, nationally recognized real estate expert (Inmannews June 11, 2012)

• DO I JEOPARDIZE MY MORTGAGE APPLICATION BY CHANGING JOBS BEFORE THE LOAN CLOSES?

Yes. The underwriter approved your application based on your documented income covering two years or longer, from one source. At closing you must certify that all the information in your application continues to be true, which short of committing perjury you won't be able to do if you switch jobs. Your revised job history will be numbered in days rather than years, which could cause a rejection.

Back in the pre-crisis days, underwriters had discretion to use their judgment in such cases. If the borrower was moving up to a better position in the same field, for example, they would let it go. In today's market, however, underwriter discretion has been markedly reduced, and the likelihood of rejection is uncomfortably high. The prudent thing to do is to defer the job change until after the loan closes. Nobody will care what you do then.

• WILL THE RENTAL INCOME I RECEIVE FROM RENTING OUT MY HOUSE DURING PART OF THE YEAR HELP ME QUALIFY FOR THE MORTGAGE I NEED TO BUY THAT HOUSE?

No, anticipated rental income cannot be counted as qualifying income unless it is documented in the owner's tax return for at least two years. Further, only income net of expenses would be counted, and that number would be very small or zero if you expense everything you can in order to avoid taxes.

• CAN I QUALIFY USING MY INCOME AND MY SPOUSE'S CREDIT?

No. Good credit without the means to pay is of little value to lenders, and good income without the willingness to pay is not much better. Lenders require both capacity to pay and willingness to pay in the same person.

Before the financial crisis, married couples who had one spouse with the required income and the other with good credit often took "stated income" loans. Stated income was not verified by the lender. These loans were taken in the name of the spouse with good credit, who stated that the income of the other spouse was theirs. But stated-income loans no longer exist.

• HAVE PRE-APPROVALS BECOME MORE USEFUL TO HOMEBUYERS SINCE QUALIFICATION REQUIREMENTS BECAME MORE RESTRICTIVE?

Yes and no. The main purpose of preapprovals is to establish the bona fides of potential homebuyers to home sellers and their agents, who don't want to waste time dealing with wannabe buyers who can't qualify for a mortgage. With an increasing number of potential homebuyers unable to qualify, the value of reliable preapprovals has increased.

However, the same factors that make it more difficult to qualify for a mortgage today also make preapprovals less reliable. This is especially the case with self-employed buyers, who may be rejected despite having been preapproved. Preapprovals are always subject to conditions, the most important of which is a minimum appraised value. If an appraisal comes in below the minimum, the preapproval dies.

• AS A "NONPERMANENT RESIDENT ALIEN," CAN I QUALIFY FOR A MORTGAGE?

Yes, but the terms are a little stiffer because of the risk that you might be obliged to leave the country. Lenders will require a larger down payment and/or a higher interest rate. In contrast, a "permanent resident alien" suffers no penalty.

• CAN AN EXCESS IN APPRAISED VALUE OVER THE PURCHASE PRICE BE USED TO MEET A MINIMUM DOWN PAYMENT REQUIREMENT?

No, the down payment requirement is based on the lower of purchase price and appraised value. Any excess appraised value is ignored.

• WILL SIZABLE STUDENT DEBT PREVENT MY QUALIFYING FOR A MORTGAGE?

It may if you must begin repaying the debt within the first year of the mortgage, and if the amount is large relative to income. If the payments are deferred more than a year, it is a judgment call by the underwriter who will consider the size of the student debt, your credit and perhaps other factors.

• AS A DIVORCED SPOUSE WHO REMAINS LIABLE ON AN EXISTING MORTGAGE, CAN I QUALIFY FOR A NEW MORTGAGE?

Yes, if your income is large enough to afford the payment on two mortgages. If you can afford a new mortgage but not two mortgages, you must induce your ex-spouse to refinance the mortgage in her own name. Such a provision should have been part of a separation agreement.

The only other possibility is to convince the new lender that the ex-spouse remaining in the house is sufficiently creditworthy that there is negligible risk of your having to meet two payments. That will require documentation that your ex has been making the payments on her own for at least a year.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision. …

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 39 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf. Call us at 598-3200,or, 800 677-MOVE (6683).

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision. …

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 39 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf. Call us at 598-3200,or, 800 677-MOVE (6683).

JOKE OF THE WEEK

A new guy in town walks into a bar and notices a large jar filled to the brim with $10 bills. The man approaches the bartender and asks, "What's up with the jar?"

"Well, you pay $10, and if you pass three tests, then you get all the money."

"What are the three tests?" asks the man

"Gotta pay first."

So the guy gives him the $10 bucks, and the bartender adds it to the jar.

"OK, here's what you have to do. First, you have to drink that whole bottle of pepper tequila -- the WHOLE thing at once -- and you can't make a face while doing it. Second, there's a pit bull chained up out back with a sore tooth. You have to remove the tooth with your bare hands. Third, that really ugly 90-year-old woman at the bar has never been kissed. You gotta give her a big kiss."

"Well, I've paid my $10 bucks," says the man, "so I’ll give this a try. Where’s that tequila".?.

He grabs the bottle of pepper tequila with both hands and downs it, gulp by gulp. Tears are streaming down his cheeks, but he doesn't make a face. Next, he staggers out back. Everyone in the bar hears a huge scuffle outside -- barking, yelping and growling, then silence.

Just when they think the man must be dead, he staggers back into the bar with his shirt ripped and gashes across his body.

"NOW," he says, "where’z at ol' lady with the sore tooth?"